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What should our net worth be?
My husband and I are in our early 40s with two children and we think things are going well but starting to think about retirement and if we'll be able to have enough money for it. It seems like we're all so busy trying to live life one day at a time that we forget about the goals that are years and year away! Do any of you know what our net worth should be at our age or how much we should have in savings by now? It seems like a random question but maybe it's not, I just don't know!
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C
Everyone's situation is so different that I think it's hard to answer this. I think the best place to start here is to first estimate how much you think you will need every year while in retirement. Then apply the 4% withdrawal rule that assumes you will withdraw 4% of your retirement savings per year. That dictates then that you'll need about 25 times your expected annual expenses saved up.
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C
@copperpenny Right I understand this and that it isn't easy to compare to others. We think we're on track but not sure. We still have some student loans but that's all and we've saved for a long while. Thanks for the tip on this 4% rule. Haven't heard that before.
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L
@Christy226 Another thing to consider how you plan to live during retirement. Most assume some sort of downsizing in retirement but if you want to maintain your current lifestyle you will need to account for that. My hunch is that you are on the right track by asking and planning!
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@lori478 That's a good point. And thanks, we are trying!!
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D
Read a Fidelity study that said if you're in your 30s you should have 1x your salary; if in your 40s, you should have saved about 3x your salary; if in your 50s about 6x your salary. Not sure I buy this as everyone's situation is different.
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